It’s a shame Hong Kong budget giveaways don’t solve the problem of its perennial surpluses
Alice Wu says despite the hype, the budget did not try to address the government’s dependence on land sales and stamp duties for revenue, the reason for its huge surpluses in the first place
Hong Kong’s latest budget was not daring after all, although the record surplus was audaciously large. In terms of “surprises”, I’m not sure this budget was filled with them, as Chief Executive Carrie Lam Cheng Yuet-ngor had hinted at before budget day.
But I would say this: bailing out Ocean Park and giving 10,000 students free admission was a surprising move. It would be interesting to see how the government selects these students.
Going to the amusement park is not a favourite pastime of Hongkongers. Many may visit Ocean Park on a Halloween excursion, but most people try to stay away to avoid the tourist hordes. Local people are already finding it hard to share our busy streets and narrow pavements with tourists, so Ocean Park is not our idea of an oasis.
In any case, Hongkongers were not amused by the budget. A poll conducted by the University of Hong Kong’s public opinion programme found that Hongkongers gave the budget a dissatisfaction rating that is the highest in the past four years. That’s notwithstanding the fact that the government had seemed pretty confident in the run-up to budget day: officials were talking to reporters about “massive tax breaks” for the middle class, a lot of education-targeted measures, and money to be injected into the innovation and technology industry.
Throwing money at something doesn’t make it happen. However, when it comes to innovation and technology, Hong Kong is playing catch-up. So, in desperation, money will probably help.
But not enough time has passed for us to forget all the white elephant projects that the government has created in the past two decades. Hong Kong has been throwing money into a lot of initiatives and industries in the government’s repeated attempts to create hubs. Yet, we know that the key to success lies in having the right policies and real expertise in nurturing new industries, and smart execution. That will determine whether we are investing in more concrete or a new growth engine.
The real world isn’t always like the “field of dreams” – if you build it, they may not come.
But how did we end up with so much money to throw around anyway? Consider what have been filling up the public coffers: revenue from land sales and stamp duties.
We know that property prices and rent will remain high. Home ownership will remain out of reach for many. Our city, with its high cost of living, is becoming unaffordable for the common folk. And expensive housing will continue to hamper our efforts to attract talent.
All these problems were not something the budget focused on.
Hong Kong is chained to an unaffordable property market. Investing in the future and relief measures that would make life less harsh for the people is the government’s responsibility. They are not optional items on the government agenda, nor should they be dependent on high land premiums.
Perhaps the most surprising thing about the budget is how much light it shed on Lam’s “new fiscal philosophy”. This isn’t the aim to “wisely use our accumulated surpluses for the community”, as she stated in her manifesto while campaigning for the city’s top job.
Judging from the budget, the new fiscal philosophy is hype and dreams.
A surplus is what government took too much of, so if it is serious about caring and sharing, it should give it back to the people. It’s unfortunate that our budgets are turning into an annual trick-or-treat event: having got too much money, the government waits for the people to come begging for treats.
Alice Wu is a political consultant and a former associate director of the Asia Pacific Media Network at UCLA